In a wide-ranging and sharply critical interview, Professor M Shamsul Alam, Energy Adviser to the Consumers Association of Bangladesh (CAB), has warned that Bangladesh’s power and energy sector risks “institutionalising corruption” unless the newly elected government undertakes deep structural reform.
Speaking to Just Energy News Editor Md Shamim Jahangir, Prof Alam argued that the sector’s shift from a public service model to a profit-driven commercial framework has led to governance failures, regulatory weakness and escalating costs borne primarily by ordinary consumers.
Md Shamim Jahangir: Professor Alam, from a consumer’s perspective, how do you assess the current state of Bangladesh’s power and energy sector?
Prof M Shamsul Alam:
To understand today’s crisis, we must return to the 1990s. That was when the policy shift began — power and energy were no longer treated primarily as public services, but as commercial commodities. Corporatisation and privatisation followed.
Major state entities were restructured, including the Bangladesh Power Development Board (BPDB), Bangladesh Petroleum Corporation (BPC), Petrobangla, Dhaka Power Distribution Company (DPDC), Dhaka Electric Supply Company (DESCO), Power Grid Company of Bangladesh (PGCB), and Titas Gas Transmission and Distribution Company.
Shares were issued. Boards were formed. Directors began receiving sitting allowances and corporate-style privileges. But fundamental questions remain unanswered: Who acquired these shares? At what valuation? Where did the proceeds go?
“The people are the true owners of these assets,” Prof Alam said. “Yet there has never been full transparency.”
He claims the sector is now fragmented into around 70–75 entities, increasing administrative costs without improving accountability.
The Quick Rental Law and ‘Legalised Indemnity’
Prof Shamsul Alam was particularly critical of the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act, 2010 — commonly known as the Quick Enhancement of Electricity and Energy Supply Act.
According to him, the law granted indemnity to officials involved in fast-tracked power contracts, effectively shielding decision-makers from legal scrutiny.
“Instead of strengthening public generation under BPDB, priority was given to private rental and quick-rental plants,” he said. “If public generation had been properly financed, electricity could have been supplied at significantly lower cost.”
Today, Bangladesh reportedly maintains surplus installed capacity — in some estimates approaching 50% — yet numerous plants remain idle due to fuel shortages. Despite this, capacity payments continue.
“This is not subsidy for the people,” he argued. “It is structural inefficiency embedded into contracts.”
Tk 55,000 Crore Subsidy — Public Relief or Cover for Losses?
Md Shamim Jahangir: The interim administration led by Muhammad Yunus stated that Tk 55,000 crore in power subsidies and Tk 7,000–8,000 crore in energy subsidies were provided last fiscal year. How can you describe the sector as being looted when such subsidies exist?
Prof M Shamsul Alam:
“The question is — who benefited from that Tk 55,000 crore? Was it used to make electricity affordable for consumers, or to cover inflated agreements and financial leakages?”
He argues that repeated tariff hikes have masked systemic inefficiencies. In 2022, CAB presented an analysis claiming electricity prices could be reduced by Tk 4 per unit through structural reform.
“Instead, tariffs rose repeatedly. VAT and Advance Income Tax were passed directly onto consumers,” he said. “Nearly 80% of our population are lower-income households. Energy price hikes directly fuel inflation.”
Rooppur and Cross-Border Contracts
Prof M Shamsul Alam also expressed concern over large-scale energy projects, including the Rooppur Nuclear Power Plant, where reported project costs have escalated significantly.
He further questioned the power purchase agreement involving India’s Adani Group, alleging that per-unit costs from imported coal-based generation appear high relative to comparable benchmarks.
“If committees acknowledge irregularities, what corrective action follows?” he asked. “If a contract is found unlawful, it must be voided.”
Regulatory Oversight Under Scrutiny
A central focus of the interview was the Bangladesh Energy Regulatory Commission (BERC).
Prof M Shamsul Alam accused the regulator of:
- Raising tariffs without meaningful incorporation of public input
- Ignoring consumer submissions during hearings
- Weak enforcement of LPG price compliance
- Creating a Tk 100 crore research fund financed through tariff increases
“Research is not BERC’s core statutory function,” he said. “Tariff fixation cannot become a hidden taxation mechanism.”
CAB has boycotted certain hearings and formally petitioned authorities seeking accountability.
When asked whether he was accusing individual commissioners of corruption, Prof Alam responded cautiously:
“It is not about individuals. When procedures are ignored and public participation becomes symbolic, corruption becomes institutionalised — even if intentions are presented as good.”
IMF Conditions and Sovereign Guarantees
Addressing International Monetary Fund-linked reforms, Prof Alam acknowledged Bangladesh’s concessional loan arrangements but questioned whether tariff hikes are the only viable adjustment tool.
“When global fuel prices fall, why do tariffs remain high?” he asked.
On sovereign guarantees tied to controversial agreements, he argued:
“A sovereign guarantee applies only to a lawful agreement. If a court declares the agreement void, the guarantee collapses with it.”
He referenced previous energy-sector cases where contracts were cancelled following judicial rulings without compensation liability.
A Three-Point Reform Agenda
Prof M Shamsul Alam outlined what he describes as a necessary reset for the incoming government:
1. Restore Power & Energy as a Public Service
Shift from profit-maximisation to cost-recovery. Essential utilities, he argues, should not operate as dividend-generating corporate enterprises.
2. Cancel Unnecessary or Questionable Plants
Subject to judicial review, contracts issued under controversial provisions should be reassessed or voided where public interest has been compromised.
3. Reform and Strengthen BERC
Amend the regulatory framework to:
- Make public participation legally binding
- Ensure transparent tariff calculations
- Prevent arbitrary price adjustments
“Under the current structure, hearings are held — but the commission is not obliged to incorporate consumer views. That must change.”
A Warning to the Next Administration
Prof M Shamsul Alam concluded with a broader caution to policymakers:
“The previous government faced public backlash amid allegations of corruption. The interim administration did not fundamentally break that pattern. If the next elected government continues the same model — high tariffs, weak oversight, and protection of questionable contracts — public frustration will deepen.”
For him, the issue extends beyond financial management.
“Electricity and energy are not luxury commodities. They are foundational public services. The government must serve the people — not treat them as revenue sources.”
As Bangladesh for political transition, Prof Alam’s message is clear: reform must prioritise transparency, accountability and consumer rights — or risk embedding structural dysfunction for years to come.